Information for questions 20-28 The following figure shows the cost curves for a firm in a perfectly competitive market. The curves depicted are marginal cost (MC), average cost (AC), and average variable cost (AVC). Market demand is given by Q=3500 – 5 x p. For the first four questions in this group (20-23, not all in the Canvas version), the firm is operating in the short run, with a market price is $50. For the numeric questions, only the exact answer is accepted, so make sure to double check your reasoning. You can get exact answers with the usual convention that lines cross grid points, and each other, where they seem to cross. Enter 0, if the question cannot be answered at all with the information provided.   Now consider the transition from the short run to the long run. We’ll assume that in the long run many firms identical to the one depicted can enter or exit the market freely. What best describes the transition from the short run to the long run?

Information for questions 13-19 The following figure shows the cost curves for a firm in a perfectly competitive market. Only exact answers are accepted. For numeric questions, enter 0, if the question cannot be answered with the information provided. In particular, since the figure does not have a grid, do not try to approximate any numbers using its scale. You can only use the numbers provided on the figure to perform an exact calculation. If you feel that an exact calculation is not possible for a given question, then the correct answer would be 0, or “none of the above.”   For the first three questions in this group, the firm is operating in the short run.   For the firm to operate in the short run (that is, for it not to shut down), the market price must larger than or equal to:

Information for questions 10-12 A firm’s short-run total cost function is given by C=550 + 300 Q + 10 Q2. Capital is the only input that is fixed in the short run, that is, it cannot be changed in the short run. Labor, on the other hand, is variable, and can be changed in the short run. The rental rate is $25 per unit of capital, the wage is $50 per unit of labor. For this group, answers within 1% of the correct answer are accepted, so carry several decimals in your calculations. Enter 0 if the question cannot be answered with the information provided.   How many units of capital is the firm using, in the short run?

Information for questions 16-17 A firm has short-run production function given by . Note that in the short run, we can replace K in the production function f(L,K) by whatever constant value K has in the short run, and so the production function becomes effectively only a function of L. Here, the firm is using 10 units of capital in the short-run. This firm’s short-run (total) cost function is given by .   Calculate the rental rate. Only the exact answer is accepted. Write 0 if the exact answer cannot be calculated with the information given.

Information for questions 34-40 The figure shows the Demand curve for a monopoly. This monopolist has no fixed cost, and a constant Marginal Cost = 0.5 (the Marginal Cost curve is also shown). Note that one horizontal grid space = 5 units, while one vertical grid space = $0.25. For all numeric questions, only the the exact answer will be accepted. Adhere to the following convention, which is necessary to get exact answers: if a line seems to cross an intersection of the grid, then by convention assume that it does. For example, the choke point of the demand curve seems to be where P=3, Q=0, so assume that that is the exact choke point, that is, that when the price P=3, then the demand is Q=0, exactly. If a question cannot be answered with the information given, enter the number 0.   Calculate the profit per unit that the monopolist makes. Note: if the profit per unit is a loss, enter a negative number.

Information for questions 20-28 The following figure shows the cost curves for a firm in a perfectly competitive market. The curves depicted are marginal cost (MC), average cost (AC), and average variable cost (AVC). Market demand is given by Q=3500 – 5 x p. For the first four questions in this group (20-23, not all in the Canvas version), the firm is operating in the short run, with a market price is $50. For the numeric questions, only the exact answer is accepted, so make sure to double check your reasoning. You can get exact answers with the usual convention that lines cross grid points, and each other, where they seem to cross. Enter 0, if the question cannot be answered at all with the information provided.   How many units will the firm produce, if it does not shut down?

Information for questions 13-19 The following figure shows the cost curves for a firm in a perfectly competitive market. Only exact answers are accepted. For numeric questions, enter 0, if the question cannot be answered with the information provided. In particular, since the figure does not have a grid, do not try to approximate any numbers using its scale. You can only use the numbers provided on the figure to perform an exact calculation. If you feel that an exact calculation is not possible for a given question, then the correct answer would be 0, or “none of the above.”   For the first three questions in this group, the firm is operating in the short run.   If the market price is $22 per unit, calculate the firm’s profits. Enter a positive number for a (positive) profit, and a negative number for a loss, that is, a negative profit.

Information for questions 8-9 Paula received two job offers: one as a TV director for a large Hollywood producer, earning $225,000 per year; another as the director for a small regional playhouse, for $120,000 per year. She turns both offers down and instead decides to start her own representation agency, called Paula’s Actors. She pays $60,000 per year to her assistant, Mario, $110,000 per year to rent her office, $55,000 in office supplies, and $23,000 in utility bills. Only exact answer is accepted, so make sure to double check your calculations.   Calculate the economic costs of Paula’s Actors, per year.

Information for questions 20-28 The following figure shows the cost curves for a firm in a perfectly competitive market. The curves depicted are marginal cost (MC), average cost (AC), and average variable cost (AVC). Market demand is given by Q=3500 – 5 x p. For the first four questions in this group (20-23, not all in the Canvas version), the firm is operating in the short run, with a market price is $50. For the numeric questions, only the exact answer is accepted, so make sure to double check your reasoning. You can get exact answers with the usual convention that lines cross grid points, and each other, where they seem to cross. Enter 0, if the question cannot be answered at all with the information provided.   How much profit does the firm make, if it does not shut down? Enter a positive number for a (positive) profit, and a negative number for a loss, that is, a negative profit.

Information for questions 20-28 The following figure shows the cost curves for a firm in a perfectly competitive market. The curves depicted are marginal cost (MC), average cost (AC), and average variable cost (AVC). Market demand is given by Q=3500 – 5 x p. For the first four questions in this group (20-23, not all in the Canvas version), the firm is operating in the short run, with a market price is $50. For the numeric questions, only the exact answer is accepted, so make sure to double check your reasoning. You can get exact answers with the usual convention that lines cross grid points, and each other, where they seem to cross. Enter 0, if the question cannot be answered at all with the information provided.   By looking at the figure, which of the following best describes the firm’s decision on whether to shut down? At a market price of $50…